Local Real Estate Watch: First Time Home Buyers
Roseville, Calif. – The shortage of houses on the market and the increasing prices are not good for first time home buyers. In January of this year, the share of first time home buyers dropped to less than 30 percent of all existing home sales. This is down from 33 percent for the same month last year.
First time home buyers typically have a smaller budget and they are looking for homes in the lower price a range which is where the lack of listings is the harshest. Demand is not the issue, there are plenty of first time buyers, but they can’t find a home on the market which fits their needs and, if they do, the competition from other buyers is high. This past weekend we wrote an offer for a first time buyer on a cute cottage in Elk Grove. Our client is financially stronger than many first time buyers and was able to offer the sellers $10,000 more than their asking price. The sellers had six offers and ours did not even get a counter. If the shortage continues, this is not going to be a good spring market.
In January, homes selling for $250,000 or less fell 15.5 percent from a year ago while the biggest gain was in homes selling for more than $500,000 which increased by 25 percent. Existing home prices were up in every major region. The West had the most expensive homes at a median of $362,600 in January, an 8.8 percent increase from over a year ago. The Northeast’s median prices reached $269,100 in January, up 6.8 percent annually. The South’s median home price of $208,200 is up 4.3 percent from a year ago, while the Midwest’s $188,000 median price is up by 8.7 percent.
You don’t have to consult an expert to see it is clear many of our housing markets are becoming less affordable and we need to see supply move closer to demand to reduce the upward pressure on home prices.
